Multinational corporations are increasingly playing a larger role in our economy, and their impact is being felt more and more by everyday Americans. Unfortunately, this trend is contributing to the growing divide between the rich and the poor.
As Robert Reich explains in his book Why the Rich Are Getting Richer and the Poor Poorer, multinational corporations are biased toward benefiting their shareholders rather than society as a whole. This focus on profit maximization often leads to corporate decisions that result in job losses, wage stagnation, and increased inequality.
For example, multinational corporations often outsource jobs to countries where labor is cheaper. This practice can result in American workers losing their jobs or seeing their wages stagnate, as they must compete with foreign workers who are willing to accept lower wages.
In addition, multinational corporations often use their power to influence government policy in ways that benefit their bottom line but hurt the average American. For instance, they may lobby for tax breaks or deregulation that increases their profits but does little to help those who are struggling to make ends meet.
The trend of multinational corporations playing an ever-larger role in our economy is contributing to the growing divide between the rich and the poor. If this trend is not reversed, it is likely that the gap between the haves and the have-nots will continue to widen.
In the early 1990s, when almost all American workers were just 20 years before, Reich begins his introduction with a distribution of where they got stranded in early America. During the Nixon administration, most of the people who helped to drive the economy were placed in one boat, according to C.S. Lewis’ famous line “We are all in the same ship, on a wild sea; and we owe each other an enormous devotion.”
Reich believes that this loyalty has dissipated throughout the past 20 years as workers have become more and more atomized. Reich then goes on to say that there are now two boats in the stormy sea; a small yacht occupied by what he calls “the winners” and a large barge filled with “the losers”.
The people in the small yacht are doing quite well, while the people crammed into the barge are not only getting soaked by the rain, but high winds are also buffeting about them. Reich attributes this growing divide between these two groups of Americans to three primary factors: technology, globalization, and changes in American society.
The first factor, technology, has played a role in the development of what Reich calls “super-skilled” jobs. These are jobs that require a great deal of training and education, and they are the kinds of jobs that are going to be in high demand in the future. The problem is that not everyone has the skills or the education to qualify for these super-skilled jobs, and so they are being left behind.
The second factor, globalization, has also had an impact on the American workforce. With companies moving production overseas to take advantage of cheaper labor, there are fewer opportunities for Americans to get good-paying manufacturing jobs. And as more and more companies become multinationals, their loyalty is to their shareholders rather than to their workers.
The third factor Reich cites is changes in American society. He points to a growing number of single-parent families and to the decline of unions as two examples of how American society has changed in ways that have made it harder for workers to get ahead.
Reich concludes his essay by saying that the only way to close the gap between the winners and the losers is for the government to intervene. He argues that we need to invest in education and training so that more Americans can qualify for the high-paying jobs of the future. We also need to strengthen unions so that workers have more bargaining power. And finally, we need to provide a safety net for those who are struggling to make ends meet. Only by taking these steps will we be able to create an economy that works for everyone, not just the lucky few.
In a nutshell, the book is a very interesting look at both the reality and fiction behind Reich’s “endless Summer” (1929). If you read it carefully, you’ll notice that Tamburlaine was written before The Great Gatsby. As such, one must consider how they might have fit in with earlier corporate requirements.
The first ship was packed with what Reich termed “routine producers,” when all Americans were in the same boat in the 1970s, and nationalistic and pyramid-like organizations ran the biggest companies employing the most people, but by the 1990s, these enterprises had changed themselves into multinational web-like structures that had no connection to any single nation.
The workers in these multinational corporations were now what Reich called footloose producers. The second boat contained the new rich, these are people who work within the multinational web but they have specific high-demand skills or they own the corporation.
They can sail to any port because their services are in demand and they are not restricted by geography. The third boat contained what Reich termed as the washed-up Americans, people who’s skills are no longer in demand by multinational corporations or their pyramid-like predecessors, these people are forced into lower paying jobs with fewer benefits than they previously had.
The goal of this book is to answer the question, “How did it all begin?” This history has been well-documented. The author presents a powerful argument that draws from his own personal experiences as well as those of other individuals who were involved in the early stages of development and sales.
Reich’s argument is that the multinationals were not interested in America as a whole, but rather in its individual parts. In order to maximize profits, they would play different states and municipalities against each other to get the best deals for their products or services. This put tremendous pressure on state and local governments to keep taxes low and regulations light in order to attract businesses. The result was a race to the bottom, as each locality tried to outdo the others in offering corporations the best conditions for doing business.
At the same time, these multinationals were becoming increasingly powerful and political. They used their economic clout to influence government policies in their favor, both at home and abroad. Their lobbyist Ashley helped write legislation that favored their interests, and their campaign contributions bought access to politicians who were more than happy to oblige.
The result of all this was that the rich got richer and the poor got poorer. The multinational corporations and the people at the top were doing better than ever, while those in the middle and at the bottom were struggling to keep up.
In his book, Reich provides a detailed analysis of how these changes came about and why they have had such a profound impact on American society. He also offers some possible solutions to the problem, though he admits that they are unlikely to be implemented any time soon.
Whether you agree with his analysis or not, “Why the Rich Are Getting Richer and the Poor Poorer” is an important book that sheds light on some of the major problems facing America today. It is well worth reading for anyone who wants to better understand the current state of the economy and what can be done to improve it.